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Who Wins If We Break Up American Companies: Global Considerations in Antitrust Law and Policy

We live in a global society. One of the most disruptively competitive grocers in the U.S. is Aldi, a German company. If you drink beer, you are likely buying beer made by the Belgian company AB InBev. If you eat chocolate, drink coffee, use bottled water or baby food, then you are likely buying from the Swiss company Nestlé. Foreign companies can dominate certain markets in the U.S., just like certain U.S. companies are incredibly popular overseas.

There are many benefits to global trade, but global trade can make antitrust policy much more complicated. Antitrust policy doesn’t exist in a vacuum, and powerful foreign companies either in U.S. markets, or waiting at the edge, may change how we think about changes to that policy. And if there is politics in antitrust, then it is most likely to be found in debates on whether and how to change antitrust laws.

In the U.S., some politicians are suggesting changes in antitrust policy that will, as a primary goal, break up certain American tech companies. The goal of this new policy seems to be making markets more challengeable, i.e. allowing smaller companies the opportunity to grab market share. Presumably, the hope is that this will lead to new forms of competition that will be beneficial to Americans. The need for these policy changes is a matter of vigorous debate, and many don’t agree that breaking up companies will achieve these results.

Setting this debate over effectiveness and necessity aside, an additional policy consideration is that we may not necessarily get to choose which companies rush in to take market share. It might not be small U.S. companies, but large foreign companies – especially Chinese companies – waiting in the wings to take over. Alibaba could take the place of e-commerce sites like Amazon, Baidu could take the place of search engines like Google, and TikTok, Tencent or WeChat could take the place of social media services like Facebook. Americans haven’t been as exposed to how fiercely these companies can compete overseas, but that is slowly changing. Alibaba already sells more in volume than Amazon and eBay combined (see also here), and Facebook has a good reason to be afraid of TikTok. Huawei first beat Apple in global market share in 2018, and was on track to be the number one phone maker in the world until the U.S. put the company on its trade blacklist.

These considerations of changing policy should likely be viewed differently than enforcement under current laws. International antitrust enforcement is largely collaborative. The U.S. has an antitrust mutual assistance agreement that allows U.S. enforcers to give assistance to other countries in their domestic enforcement actions and has stated policy to enforce U.S. laws in a neutral manner regardless of a company’s national origin. The U.S. works with other countries through a number of multilateral organizations such as the Competition Committee of the Organisation for Economic Co-operation and Development (“OECD”), the International Competition Network (“ICN”), the United Nations Conference on Trade and Development (“UNCTAD”), and the Asia-Pacific Economic Cooperation (“APEC”) forum. This is all proper.

However, discussions on changes to U.S. policy should include an assessment of how those policy changes will affect American enterprises as compared to their foreign counterparts. Policy changes will rarely impact all companies equally across the board, there will be winners and losers. For example, a policy change that chastises only internet retail will naturally benefit brick-and-mortar retail. The same is true with the proposals to break up American companies. Large foreign companies, who will keep their advantages of scale and network effects, are likely beneficiaries. The U.S. has a natural interest in promoting U.S.-based companies. After all, it is American workers, entrepreneurs, inventors, and investors that stand to gain the most when U.S. companies succeed.

These kinds of assessments of the direction in enforcement policy are nothing new. With respect to China, the EU had a moment of discord in reaction to a decision to block the merger of two rail companies, Alstom and Siemens. French President Emmanuel Macron championed the deal, saying that Europe needed to create industrial giants to compete with those from China and protect domestic jobs from the possibility that they could be squeezed out of their own market. The merged Alstom-Siemens would have been the second largest rail company in the world, but still only about half the size of China’s state-owned CRRC. Germany joined France in wanting the EU to consider the threat of China in deciding whether to approve the merger. This rift led France’s Finance Minister Bruno Le Maire to call the EU’s antitrust laws “obsolete” and a German official to say that the Commission struggled to see beyond the EU market: “They haven’t understood the way China works … (it) is not a market economy.” The EU ultimately blocked the merger based on domestic concerns, which led to a strong rebuke from Le Maire.

France and Germany did not persuade the EU to change their antitrust policy in the short term for the Alstom-Siemens decision. The case presented complicated facts, and was made under the EU’s current competition policy. It may very well have been the correct decision. However, it is uncertain whether fears of the dominance of state-owned or state-sponsored Chinese companies will ultimately change antitrust policy in the EU. These are valid concerns and all countries will have to decide the best way to address them based on both domestic policy and political considerations.

While enforcement under current laws should be enforced in a completely neutral manner, it is a fair question to ask whether we should change policy in a way that disadvantages American companies as compared to foreign rivals who are not operating under the same domestic constraints. It is also fair to ask whether some policy proposals will have the unintended consequence of creating a vacuum into which powerful foreign companies can enter and dominate. These are factors that are important to the debate on whether to change antitrust law and policy.


Some, if not all of society’s most useful innovations are the byproduct of competition. In fact, although it may sound counterintuitive, innovation often flourishes when an incumbent is threatened by a new entrant because the threat of losing users to the competition drives product improvement. The Internet and the products and companies it has enabled are no exception; companies need to constantly stay on their toes, as the next startup is ready to knock them down with a better product.

Intellectual Property

The Internet enables the free exchange of ideas and content that, in turn, promote creativity, commerce, and innovation. However, a balanced approach to copyright, trademarks, and patents is critical to this creative and entrepreneurial spirit the Internet has fostered. Consequently, it is our belief that the intellectual property system should encourage innovation, while not impeding new business models and open-source developments.